A site about the future of financial services and money.

Matter of fact, I turned 41 this morning and take a multivitamin so I’m definitely not a millennial.

I think I also pulled a hammie last week.

While taking my vitamin.

But, I give a sh*t about millennials and financial services because I have been a young banking professional who had to learn everything financial himself. Who had to learn to balance a $19k annual salary with bills, who had to move back home for a time after college graduation, who had student loan debt, who hated the time requirements of getting financially educated on my already time-limited life.

And all the while I was trying to fall in love (check), get married (check), buy a home (check), get pets (check, check, and check), and have kids (check, check, and check).

While I was doing all of this growing up, I was also growing up in the financial services industry.

I started as a copywriter for accounts like Capital One and BB&T, then managed a creative department whose sole focus was to understand what makes people change banks and get these consumers to select our clients, to finally ending up in sales where I sold holistic million dollar customer acquisition strategies that covered everything from how to design your checking account menu so there’s something easy to sell for every demographic, to front-line sales training, to direct marketing that gave away free gifts with every checking account.

Despite my success during that time “getting ahead,” it felt like a celebration of horsesh*t (feel free to tweet this) as we were also optimizing our bank clients’ overdraft fees and back office tactics like posting high to low and our clients were “killin it” when it came to optimizing fee income.

How did we sleep at night you may ask?

On piles of money like this:

But I did have a conscience.

And that lead to a question.

Where does the consumer go for great information about getting ahead when it seems as if the very system meant to support them (banking) was in many ways against them?

The easy answer was financial literacy. But who wants that?

We all want the outcomes but without the work. My problem with literacy is that it’s slow and painful and that it knowingly or unknowingly propagates a system that doesn’t give a sh*t about the customer.

Well I give a sh*t. I give many sh*ts! And we’re too far a long technologically and with smart phone adoption to rely on the systems of the past.

If you need to do 10 hours of work to get ahead, you won’t always do it. I doubt many others would either.

But I’m the anomaly as I did do many hours of research on all of this to get ahead. This is the book I read when we bought our first home:

Seriously…I read that sh*t.

WHO.

DOES.

THAT?

Seriously, who the hell does that? Only a crazy person. But I’m crazy like that, I guess.

But I also know that people aren’t geared like me.

And we also have less time now than every before. So asking someone to read that book, or take a class, come to the bank, or sit though a seminar to get financially educated is a bad system. But it keeps the status quo.

What we should be asking ourselves as an industry of FinTech, is where is the tech that gets the average user 90% of the benefit with only 10% of the effort? If the smartest banker is in your pocket (your phone), then why do today’s banking apps merely help to deposit checks and transfer funds?

Where is my consultative financial best friend app for life’s most important decisions?

When I was 21, I waited tables in a steakhouse. I know, I’m cool like that. At the time, the management’s philosophy on hiring young college-aged waiters and waitresses was to “only hire someone you’d date.” But it wasn’t as politely worded as that. As a result, the staff was fun and sexy and, ultimately, temporary.

After I graduated and moved away to Atlanta for a year and then moved back to my parents’ basement for 5 months – don’t judge – I worked two jobs to get that fixed ASAP! One of the jobs was at that same steakhouse. Only something big had changed.

The staff was of all ages this time – 21 to 58ish – and was friendly and encouraging and supportive as never before. There were many career waiter and waitresses there. It was odd after having last remembered it as a swanky sexy server steakhouse (feel free to tweet that).

What changed? The new management’s philosophy had been implemented. The hiring philosophy now was “only hire someone if you’d let them wait on your parents.”

In this new environment, I learned what it’s truly like to serve someone. To kneel at the table, to upsell, to craft a unique dining experience that a customer would never forget. To fold your leftovers like a tiny tinfoil steer or duck.

Today’s FinTech is mostly sexy and fun and, ultimately, temporary. We’re seeing a contraction now as there’s a bigger gap in Series A to B financing and sh*t is getting harder. Sexy doesn’t like hard.

But a real career FinTech-er doesn’t sweat that. They are in it for the long haul. They know the cyclical nature of our industry and have ridden an up and down or two. They know whom they serve and how to serve them. They do it for a living.

For. A. Living.

It’s what happens when you focus on the promise of what financial services could be instead of just the products that make up a bank.

So, this Gen Xer wants to know: who do you serve in FinTech and how do you serve them?

You have to know this to create meaningful value and change in our industry.

“FinTech” is half financial service and half technology, It isn’t one without the other. Those who marry the two and who are creating blue ocean opportunities will serve the future of FinTech (#FutureFinTech) for generations.

Those who won’t will die alone…at a steakhouse (feel free to tweet that).

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Four months ago the Consumer Financial Protection Bureau released a new interactive tool to help consumers understand the mortgage rate disparity in any given market.

Here’s what it looks like conceptually and in real life usage on my iPhone:

PHONE VIEW:

This tool prompted a lot of backlash among mortgage originators about how this doesn’t account for the complexity of different loan types and how the tool can actually mislead the public.

But let’s look at the problem the CFPB is trying to solve: 47% of homebuyers don’t compare rates1.

If that’s the problem, then I believe the tool does a great job of showing the user that there isn’t parity within any market. The end result of using the tool, the user should understand that seeking multiple loan bids will save them money.

When we first walked down the path to forming Hip Pocket, we took a similar approach. We asked anyone in the Lincoln, Nebraska market to tell us where their current mortgage stood (rate, amount, home value, and remaining term) and we’d show them where they stood vs. their peers. We’d also then shop the market for them if they wanted and show them their best options as well as the disparity within the market.

Here’s a bit about what that looked like:

With only two out of 17 banks and credit unions in our market offering a 3.5% mortgage at the time, a shopper’s chances of finding both of the lowest APR loans with just two phone calls or online inquiries was 1.38%.

Now this isn’t a race to the bottom on price within banking! That could be done but I’d advocate for bankers and credit union executives to consider this a wide open race to the top.

At the top is the ability to create and promote transparency in the marketplace so your customers and prospects can see that they can trust you to look after their financial well-being. When you do this, Gallup shows that you will win more engagement, confidence, accounts, and longer tenure2.

Competing on “relationships” is another way of saying that you don’t have the tools, rates, and products to compete out in the open. Eventually the CPFB or other entities (read here or here) will force transparency to the forefront.

Only one bank or credit union can choose to lead this effort in any given market. I’d rather be the leader in transparency instead of lumped into the group of “followers” when this happens.

I’ve had the privilege of being on the inside of a many corporate product development initiatives.

My biggest regret is that they didn’t have code names like Operation Condor or Operation Honeydew.

My second biggest regret is that we did several of them all wrong by starting with an idea or a company/bank-first perspective. What I mean by that is that we were attempting to answer questions like these:

“How can we optimize profit per checking account?”

“How can we redesign our product offerings to make more money?”

“How can we cross-sell more products to our current customer base?” “How can we differentiate our industry or product offerings to diversify and lower risk?”

“What should our project code name be? Is Condor taken?”

These questions lead to brainstorming for potential ideas/solutions to the problems. Our problems. In several cases they lead to profitable solutions but they never lead to large insights that could scale and create large profits. Your cash cow is meant to have cash calves.

If I had to do all of these meetings over again I would have shifted the focus onto the end customer and look for pain points we could solve. I would look for insights into their problems. Insights.

We don’t do this enough if at all in the financial services industry and it’s the reason that tech firms from outside our industry (@Simple for example) have entered into the foray. They believed bank customers hate banking. The customers hate the technology and the service. They asked questions and sought insights into those problems and identified opportunity if they could provide solutions.

See the difference?

Insights into customer problems = sellable solutions.

Ideas to solve our problems = potential solutions that then need to be sold.

Just over a year ago I moved my focus from working toward ideas to working toward insights. It was at this time that I became curious as to why more bank customers don’t get better rates on their mortgages and auto loans.

In looking at the market and bank data, I saw a wide discrepancy in those who were getting the best rates and those who were at the bottom. Here’s an example I presented last week from a market in Nebraska:

I knew this rate discrepancy wasn’t due to FICO or other credit worthy issues because I could see directly into the customer files.

So, was this discrepancy due to a lack of information, poor emotional decision making, apathy, or something else? The only way to find out was to “get out of the building” and interview people.

After hundreds of qualitative and quantitative interviews, I found the consumer insights that now power the technology behind my patent-pending software company, Hip Pocket.

More importantly, the early client results are providing validation that we’re solving a real problem and not just supplying another idea. The bank gets to solve a real problem around context and confidence for the customer and position it for what it is: a consultative conversation to save the customer/prospect money.

I for one am very excited to hear from Krista Berlincourt of @Simple present a keynote at the ABA Bank Marketing Conference in Orlando next week. I want to learn from those outside our industry, to broaden my perspective, to hear their insights, and to ultimately implement the same insight-generating processes into my company, Hip Pocket.

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In May of 2009, the sales manager at my employer sat me down and said, “I’m thinking about letting you go, Mark.”

My first thought looked something like this:

Then, after I visualized leaping across the desk and slapping him, I asked, “Why is that?”

His response, which I will reveal in full at the American Bankers Association Marketing & Retail Conference in September, was along the lines of me disobeying his directive to not better myself.

Well, at least that’s what I heard.

I was 34 years old at the time and had been in our industry for more than five years. I started as a copywriter before being promoted to creative manager and then been asked to move into selling strategic marketing initiatives. Selling under the watchful eye of this new manager.

My past promotions had come quickly and in large part because my previous manager was very good and because I couldn’t stop asking questions about why we did things the way we did. Many times I was given very insightful and interesting answers to these questions that furthered my understanding of customer acquisition and customer profitability. Other times I wasn’t given a good reason. It was in these times that I flourished.

“Was there a better way?” I’d ask myself or others. My good manager gave me freedom to explore the answers.

I eventually became the second youngest and second quickest promoted VP in the company’s history. And then I ran into someone who didn’t like questions. He probably didn’t like puppies either. Or Christmas. Or puppies as Christmas gifts. He probably kicked them even.

This person – who will remain nameless unless you buy me a beer – wanted things to stay the same. He wanted to sell like he did in the 1980s, 1990s, and 2000s. Only this was 2009, a year after the greatest recession most of us had seen in our lifetimes.

Sh*t was broken. Ignoring broken sh*t won’t make it less broken. (Tweet that gem, I dare you!).

It became clear that this son of a bitc gun wasn’t going to make a seat at the table for me. This was his table. A table for one.

So I did what I knew I had to do. I built and set my own table. I bought the groceries. I cooked the dinner. I served the meal. I bussed the table. I…let this metaphor get away from me.

What I did was ask questions. I tried new stuff without permission. I begged for forgiveness when needed. Sometimes I hid in the toilet to get away from this manager.

Thankfully, I also discovered the power of LinkedIn at this same time.

LinkedIn gave me connection and insight into our industry’s best and brightest minds. It was there where I reached out and connected to Ron Shevlin, Jim Marous, Jeffry Pilcher, JP Nichols, and others. I did this so I could learn from them. So I could eventually join them as a thought leader in our industry.

LinkedIn allowed me to advertise webinars when I didn’t have any content designed. When people signed up, I designed the presentation.

LinkedIn and my blog gave me a platform to give away good information, not canned marketing solutions.

And it worked! I made sales, including the largest one the company had in 18 months.

I was on a roll.

It was then that I made my biggest strategic bet: I tried to better myself by doing something on my own time and on my own dime. When my “manager” found out, he told me, “I’m thinking about letting you go, Mark.”

I had the pleasure of teaching Social Media Best Practices for Financial Institutions at the 2014 ABA Stonier Graduate School. I was a three and a half hour course over two days. You can see the presentation deck here:

The attendees and I had a lot of fun, or at least I’ll say I certainly did since the evals aren’t in yet. We watched this parody video I created (http://youtu.be/Pah2EurgMOQ), we looked at four incredible case studies of banks, credit unions, and vendors who know who they are and can implement strategic social media campaigns, and covered a lot of trends.

Unfortunately, what I didn’t do was spend enough time on my favorite social media tool, LinkedIn.

I had a few slides in there including this one but it was not enough in retrospect:

I say it was not enough because among my class attendees, only about 66% were on LinkedIn and less than half had established an effective company presence on the platform. This despite the fact that LinkedIn is the 10th most visited site in the world and it’s where more than 300 million professionals go to be seen, research vendors prior to purchases, and to build their professional reputations.

Why aren’t all of you on LinkedIn in full force? Seriously, what’s wrong with you?

Maybe it’s the fact that Facebook and Twitter are B2C avenues instead of LinkedIn’s more specific B2B play? Maybe it’s because they are viewed as sources of customer engagement? Maybe it’s because they are just “sexier”?

Regardless of the reasons, banks and bankers who don’t adopt a significant and personalized presence are going to regret it in the coming years. The reason is that this is an incredibly valuable tool within consultative sales – which is what we in the banking industry are in when we do it correctly – and there is still a lot of opportunity to own your local market.

A couple of years ago some highly visible social media pundits were touting that the ROI of social media is that “your business will still be relevant in a few years.” I love that quote because it’s so full of itself it can barely fit through the door to the Internet. It’s also easy to fall back on that quote because it takes the hard work out of justifying your resource allocation. “Yes, we’re staying relevant, that’s why we have 1.5 people dedicated to social media now!”

Relevance is B.S.

The real justification for ramping up your personal and company presence on LinkedIn is the S word: Sales. You need to do it to generate sales. That’s what it’s there for and your competitors aren’t using it effectively…not yet anyway. But they will. They are coming. They are coming for you.

This isn’t me waxing rhapsodic about an unproven tool. LinkedIn has the critical mass of users to justify resources, but, more importantly, I’ve seen the sales results for myself and among bankers I consult. Simply put: it works!

I believe in the platform so much that I’ll be teaching Creating Customer-Centric LinkedIn Profiles at the 2014 ABA HiX Marketing Conference in September.

While there, I also have the privilege of co-presenting a keynote with an amazing individual named Dan Swift from LinkedIn (www.linkedin.com/in/danjswift).

In the keynote, we’ll share stories from our own career where we took ownership over our career growth instead of waiting to be selected and how LinkedIn helps with that goal. Essentially, it’s selling yourself…the greatest product you will ever have to sell.

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April 2nd marked the first ever conference from The Financial Brand. It was an intense and energy filled two days in Las Vegas, and I’m now able to decompress and process what I learned and the insights I will take forward.

1. One of the first things I did at Thursday morning’s opening event was engage in one of the many physical interactive posters that were placed throughout the vendor area. These posters asked questions of the attendees and asked them to write – not text or tweet – their answers on the poster. Who does Analog anymore? The Financial Brand does…and there in lay an interesting thought for me. In a conference that would be filled shortly by a kickass opening video from CU Grow, why ask participants to go old school analog?

That thought lead me to refrain from live tweeting any of the event or the nightly activities – I’m too old to engage in anything too incriminating – so this was indeed a conscious choice. What was the end result? I did feel as if my own internal processing of each event and the Forum as a whole went deeper. I wasn’t looking for tweets, I was looking for linking ideas to build a larger, more in-depth picture of the content. I believe I found some very new insights into some ideas that were challenging me and my clients so will mark this as a win!

Takeaway: Digital is the future but it’s meant to complement the best parts of old-school thought and engagement, not as a 100% replacement.

2. My favorite session of the entire conference was from Lani Hayward of Umpqua Bank. Her presentation on “Building the Umpqua Brand Experience” provided a great glimpse inside how Umpqua has grown, differentiated itself, and become the gold standard for brand within our industry.

My biggest takeaway was their internal barometer when it comes to going the extra mile and piloting new ideas. Innovation has to be an inside out movement within an organization for it to really settle into the DNA of the organization and it’s true with Umpqua.

What is your bank doing to try new ideas? Are we too afraid of failure to be innovative at our banks and credit unions? I rarely see financial institutions green lighting things that are bold enough to make participants giddy and excited. What’s your threshold for moving forward? A ironclad ROI guarantee? If so, you’re not trying hard enough.

Takeaway: There’s a huge chasm between Umpqua and most FIs…what’s your first step to fill that void because you need to move now! Whenever I take on a large challenge, I just take it Bird by Bird!

3. I heard at least one conference participant say that the ideas presented at the conference weren’t revolutionary. That’s true for most conferences. The success of each participant will always reside solely on their and their FIs ability to EXECUTE the ideas shared within the sessions!

Takeaway: I took away a lot of great ideas from the conference – some new iterations on things I’ve heard, and a few new ideas or at least new lens from which to look – but they are all fluff without execution. What can you do today to start executing? I’ve already moved to distillation and now implementation on at least one idea…are you ahead of or behind me?

4. Finally, what I noticed the most about the Forum was how palpable the energy was in the first night and full day. Jeffry Pilcher and the team at TheFinancialBrand.com have done an amazing job of building their brand over the last few years and for delivering fantastic content.

The Forum was the first time most readers were able to physically experience the brand and to meet Jeffry. I won’t say that the guy is a rock star but in watching people crowd around him at the first night’s reception, it was clear that this brand carried weight.

Takeaway: Do FIs ever do a good job of creating pent up demand and excitement for a product or service? I’ve only seen a very few examples from ING Canada or other countries where a campaign was deployed over time to build excitement. Are we just that boring as an industry or will be ever be able to create excitement around something? The first step will be creating something that has the potential to delight and excite our customers.

So those are my takeaways from the conference. If you have some to add, I’d love to hear about them!

Like most things at TheFinancialBrand.com, it was very comprehensive and informative. So there went my post. I guess I’ll just write about Grumpy Cat again.

But then I thought, do banks belong on LinkedIn? I don’t mean that from a simplistic point of view, I meant that from a philosophical stance. Have they earned the right to be involved in social selling? The answer is no…not yet.

As I have more and more conversations with bankers, investment peeps, realtors, and others in consultative sales, I’m convinced that bankers don’t understand the power of LinkedIn. I don’t believe they know what it means to have a holistic brand that is consistent online and offline and that is centered on delivering focused, relevant, buyer-centered content and assistance. That’s what social selling is about. That’s what LinkedIn is about!

Forgive me if my soapbox is too high, but I’ve been involved with the selling and marketing of banking products for eight years – holy crap? Is that right? I’m not that old!!!! – and it seems as if many, many, many bankers out there like to believe that the Internet was never invented. They seem to think of themselves as keepers and disseminators of information. And by this I mean they tell people about their products and hand out brochures.

They say they “get mobile” but most think of these channels as new methods to disseminate info, not as part of a revolutionary shift in the balance of sales power and processes.

If you want to better understand how much the sales process and environment has changed in the last decade, please read To Sell is Human by Daniel Pink. One of Pink’s main points is the value of content curation within the new sales environment.

Are you human? Then you need to read this.

If you don’t understand curation, you don’t know the true value of LinkedIn. And if you don’t curate, you’re missing out on an unmet need in today’s financial customer. Quite frankly, most of you are missing this.

Your bank must embrace the role of curating financial information in the lives of its customers and prospects before you can fully realize the power of LinkedIn. Until then, you will only be able to establish a presence but never a meaningful impact.

I’ll talk more about this in a future post and upcoming webinar. If you have specific questions (or gripes) please connect with me before then.

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Author

Mark Zmarzly is a financial services professional looking to help others with updates and insights about bank marketing, social media, and industry news. He is also CEO & Founder of Hip Pocket, a financial services software startup that helps banks and credit unions generate more loans, save their customers money, and build trust: www.hippocket.net.